Estate planning is about making use of powerful legal tools to control your future and the legacy you leave behind. Trusts are one of the most important of the tools that can become part of your estate plan, but not all trusts are created equal and trusts are not always the right solution for everyone.
Knowing Michigan laws on trust and estate planning is essential for anyone who has assets they are concerned about or loved ones who are looking to them for support. When you build a nest egg and build relationships with your family and friends, you need to protect both your wealth and the people who matter. Biddinger & Estelle, PC offers the trust and estate planning advice you need. Give us a call today at 989-872-5601 to get personalized advice from a Cass City trusts and estates lawyer and to get answers to important questions including:
- How do trusts work?
- Should trusts be part of your estate plan?
- How Does a Cass City, MI trust and estate planning lawyer help you?
How Do Trusts Work?
Trusts involve a trust creator, called a settlor, making a trust document. The trust document sets up the terms and type of the trust. The trust document establishes beneficiaries, who are the people that the trust is created to benefit. It also names a trustee and, often, a backup trustee. The trust document can contain additional instructions as appropriate.
Once the trust is created, it must be funded. Assets must be transferred to the trust. The trust will become the legal owner of those assets. The trust bifurcates ownership and possession. The trust owns the assets, the trustee manages the assets, and the assets are possessed and/or used by the designated beneficiaries.
There are lots of different kinds of trusts that exist within this basic framework, which provide different kinds of benefits. For example, living trusts which you create and can modify during your lifetime are able to provide protection for your assets in case of incapacity, but the assets held in the living trust are still part of your taxable estate so you get no protection from taxes after death.
Irrevocable trusts, which involve giving up virtually all control over assets, can sometimes be used for tax avoidance and can also protect your assets in different ways from living trusts. For example, assets held in irrevocable trusts may not count as Medicaid resources if you’re trying to qualify for Medicaid coverage for nursing home care.
Should Trusts be Part of Your Estate Plan?
Trusts can do lots of different things. In addition to providing various types of asset protection, you can also use trusts to protect your heirs, to avoid probate, and to address the needs of beneficiaries. An irresponsible heir who would otherwise waste money, for example, could be protected with a spendthrift trust. A gift to someone who is disabled could be made through a trust, protecting that person’s access to means-tested government benefits.
Since trusts are a powerful estate planning tool, it often makes sense for them to be part of your estate plan. However, this is not always the case. Everyone’s situation is different and there are other options for estate planning including a last will and testament; a power of attorney; and pay-on-death accounts that can accomplish similar things to trusts.
You need to get personalized advice about the estate planning process and about what type of trusts are best for your situation. You also need to ensure you follow all Michigan rules for trust creation so you get the expected protections from trust creation that you are hoping for. An attorney can provide you with assistance in understanding trust and with taking all other necessary estate planning steps to provide for your loved ones and secure your future.
How Does a Cass City, MI Trust and Estate Planning Lawyer Help?
Biddinger & Estelle, PC knows Michigan laws on trust and estate planning and we help you to work within the law to get the maximum protection it provides. Whether you create an inter vivos trust, an irrevocable trust, or other important estate planning documents, our legal team will help to make sure you are following the right formal processes and getting the protections that you would expect. To find out more about how a trust and estates lawyer at our firm can help clients in Cass City, Bad Axe, Caro, Deckerville, and surrounding areas throughout Michigan, give us a call at 989-872-5601 or contact us online today.